Salitix recovers over £600k for international spirits manufacturer

An international spirits manufacturer and global leader in Tequila products and sales, with annual global revenues exceeding USD2.5bn, found that its UK distribution business had to navigate complex import and duty legislation for its premium products.

Challenge: Complex duty calculations leads to £1.2m aged debt

Duty calculations and invoicing can be complex – and they can easily go wrong, particularly as governments and regulations change. Our client found itself with a significant duty invoicing discrepancy with a key UK grocer that was created because of a poor way of working. It resulted in a £1.2m aged debt problem, which needed to be resolved or written off.

Solution: In-depth analysis of duty agreements and invoicing

Salitix was challenged with resolving the issue. This required analysing multiple duty agreements that were in place and stock sales to multiple depots over a four-year period with a specific grocer, in conjunction with the supplier’s invoicing.

Salitix was able to identify a discrepancy in how certain duty invoices were treated in bonded versus non-bonded warehouses. This led to a detailed review with the grocer’s tax/duty team to establish the correct treatment of different invoices that aligned price files for both systems and established a better ‘way of working’ prospectively that would mitigate errors.

Results: £600k+ repaid to the supplier

Salitix managed to recover more than £600k by way of repayment by the grocer to the spirits manufacturer. Crucially, we also transformed the relationship between the retailer and the supplier, successfully implementing a ‘reset’ in the way of working that stopped the issue from re-occurring.